Easily Obtain Collateral Free Loan

Collateral free loan of upto Rs.1 crore can be obtained by new Entrepreneurs and existing small businesses in India. IndiaFilings can help you obtain collateral free loan for your business from Rs.49899/-

Collateral Free Loan

Small business and MSME enterprises can obtain collateral free loan from banks under various schemes promoted by the Government to boost Entrepreneurship and small businesses in India. Some the popular collateral free loan schemes offered by the Government are the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE Scheme) and MUDRA loan scheme. Under the CGTMSE scheme, loan of upto Rs.1 crore is provided for Enterpreneurs without any collateral security. Under the MUDRA loan scheme loan of upto Rs.10 lakhs is provided for setting up and operating of micro and small enterprises in the manufacturing, processing, trading and service sector.

IndiaFilings is the largest business services platform in India, offering a variety of services like collateral free loan syndication, CMA report preparation, company incorporation, trademark registration, GST registration, income tax filing and more. IndiaFilings can help you obtain collateral free loan for your business. Get a free consultation for obtaining collateral free loan through IndiaFilings by scheduling an appointment with an IndiaFilings Advisor.

Different Types of Bank Loan Facilities

Term Loan

Term loan is sanctioned by Banks for purchase of fixed assets like land, building, equipment and other types of assets. Repayment is fixed over a period of 5 years with EMI payments or bullet payments.

Working Capital

Working capital loan is sanctioned by Banks for working capital purposes like holding of inventory, receivables and build-up of other current assets in a business. Working capital facilities are renewable every year.

Letter of Credit

Letter of credit is a type of facility from a Bank guaranteeing a buyer's payment to a seller, in the event that the buyer is unable to make payment on the purchase as per terms of the transaction.

Bank Guarantee

Bank guarantee is a promise from a bank that the liabilities of a party will be met by the Bank in the event that the party fails to fulfill contractual obligations. Bank guarantees are typically requested while executing large projects.

Mortgage Loan

Mortgage loans are loans that are backed by real property by putting a lien on the property being mortgaged. The funds generated from a mortgage loan can be used by the business for any purpose.

Identity and Address Proof

Identity and address proof will be required for all directors and shareholders of the company to be incorporated. In case of Indian nationals, PAN is mandatory. For foreign nationals, apostilled or notarised copy of passport must be submitted mandatorily. All documents submitted must be valid. Residence proof documents like bank statement or electricity bill must be less than 2 months old.

Registered Office Proof

All companies must have a registered office in India. To prove access to the registered office, a recent copy of the electricity bill or property tax receipt or water bill must be submitted. Along with the utility bill, rental agreement or sale deed and a letter from the landlord with his/her consent to use the office as a registered office of a company must be submitted.

How many people are required to start a Proprietorship?

Only one person is required to start a Proprietorship and a Proprietorship can have only one promoter.

What are the requirements to be a Proprietor?

The Proprietor must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest in a Proprietorship with prior approval of the Government of India.

What are the documents required to start a Proprietorship?

PAN Card for the Proprietor along with identity and address proof is sufficient to start a Proprietorship and obtain other registration, as applicable or required.

What is the capital required to start a Proprietorship?

There is no limit on the minimum capital for starting a Proprietorship. Therefore, a Proprietorship can be started with any amount of minimum capital.

How will IndiaFilings help me start a Proprietorship?

An IndiaFilings Associate will understand your business requirements and help you start a Proprietorship by obtaining the relevant registrations. IndiaFilings will help obtain the necessary registrations to help the Proprietor open a bank account in the name of the business, thereby proving an identity for the business.

How to open a bank account for a Proprietorship?

To open a bank account for a Proprietorship, Reserve Bank of India mandates that the proprietor provide two forms of registration for the Proprietorship along with the PAN Card, identity proof and address proof of the Proprietor. The two forms of registration can be any two of the following: service tax registration, MSME registration, VAT/TIN/CST registration, shop & establishment Act registration, Professional license, Chartered Accountant certificate or others as provided in the RBI Know Your Customer norms.

Will my Proprietorship firm have a separate legal identity?

No, the Proprietorship firm and the Proprietor are one and the same. The PAN Card of the Proprietor will be the PAN Card of the Proprietorship business.Therefore, there will be no separate legal identity for the business. The assets and liabilities of the Proprietorship business and the Proprietor will also be one and the same.

Will my Proprietorship firm have a Certificate or Registration?

Proprietorship firms do not have a Certificate of Incorporation or Certificate of Registration. The identity and legitimacy of a Proprietorship firm is established by registering with the relevant or applicable Government authorities.

How to register the name of a Proprietorship?

There is no registry or regulation for the registering the name of a Proprietorship. Therefore, proprietorship firms can adopt any name that do not infringe on registered trademarks. Since there are no registry or regulation for registering the name of a Proprietorship, the only way to ensure exclusive use of the business name is to obtain a trademark registration of the business name.

How can I transfer my Proprietorship?

A business operated by proprietorship firm cannot be transferred to another person, unlike a Limited Liability Partnership or a Private Limited Company. Only the assets in the Proprietorship can be transferred to another person through sale. Intangible assets like Government approvals, registrations, etc., cannot be transferred to another person.

Can other people invest in a Proprietorship?

Proprietorship firms are business entity that are owned, managed and controlled by one person. So Proprietorship firms cannot issue shares or have investors.

What are the annual compliance requirements for a Proprietorship?

Proprietorship will have to file their annual tax return with the Income Tax Department. Other tax filings like service tax filing or VAT/CST filign may be necessary from time to time, based on the business activity performed. However, annual report or accounts need not be filed with the Ministry or Corporate Affairs, which is required for Limited Liability Partnerships and Companies.

Is audit required for a Proprietorship?

It is not necessary for Proprietorships to prepare audited financial statements each year. However, a tax audit may be necessary based on turnover and other criterion.

Can I later convert my Proprietorship into a Company or LLP?

Yes, there are procedures for converting your Proprietorship business into a Company or a LLP at a later date. However, the procedures to convert a proprietorship business into a Company or LLP are cumbersome, expensive and time-consuming. Therefore, it is wise for many entrepreneurs to consider and start a LLP or Company instead of a Proprietorship.

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How we help with collateral free loan

IndiaFilings.com can help syndicate collateral free bank loan for your business. Bank loan for your business can be syndicated for your business in 1 - 3 months, based on credit worthiness and other factors.

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